Republic of the Philippines

SUPREME COURT
Baguio City
THIRD DIVISION
ARMANDO ALILING,
Petitioner,

G.R. No. 185829

Present:

- versus JOSE B. FELICIANO, MANUEL BERSAMIN, JJ.

F. SAN MATEO III, JOSEPH R.
LARIOSA, and WIDE WIDE Promulgated:
WORLD EXPRESS CORPORATION,
Respondents.

VELASCO, JR., J., Chairperson

PERALTA,
ABAD,
MENDOZA, and
PERLAS-BERNABE, JJ.
Promulgated:

April 25, 2012

x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 assails and seeks to
set aside the July 3, 2008 Decision [if !supportFootnotes][1][endif] and December 15,
2008 Resolution[if !supportFootnotes][2][endif] of the Court of Appeals (CA), in CAG.R. SP No. 101309, entitled Armando Aliling v. National Labor
Relations Commission, Wide Wide World Express Corporation, Jose B.
Feliciano, Manuel F. San Mateo III and Joseph R. Lariosa. The assailed
issuances modified the Resolutions dated May 31, 2007[if !supportFootnotes][3]
[endif]
and August 31, 2007[if !supportFootnotes][4][endif] rendered by the National
Labor Relations Commission (NLRC) in NLRC NCR Case No. 00-1011166-2004, affirming the Decision dated April 25, 2006[if !supportFootnotes][5]
[endif]
of the Labor Arbiter.
The Facts
Via a letter dated June 2, 2004, [if !supportFootnotes][6][endif] respondent Wide
Wide World Express Corporation (WWWEC) offered to employ petitioner
Armando Aliling (Aliling) as Account Executive (Seafreight Sales), with

the following compensation package: a monthly salary of PhP 13,000,

transportation allowance of PhP 3,000, clothing allowance of PhP 800,
cost of living allowance of PhP 500, each payable on a per month basis
and a 14th month pay depending on the profitability and availability of
financial resources of the company. The offer came with a six (6)month probation period condition with this express caveat:
Performance during [sic] probationary period shall be made as basis
for confirmation to Regular or Permanent Status.
On June 11, 2004, Aliling and WWWEC inked an Employment
Contract[if !supportFootnotes][7][endif] under the following terms, among others:
[if !supportLists]
[endif]Conversion to regular status shall be
determined on the basis of work performance; and
[if !supportLists]
[endif]Employment services may, at any time, be
terminated for just cause or in accordance with the standards defined
at the time of engagement.[if !supportFootnotes][8][endif]
Training then started. However, instead of a Seafreight Sale
assignment, WWWEC asked Aliling to handle Ground Express (GX), a
new company product launched on June 18, 2004 involving domestic
cargo forwarding service for Luzon. Marketing this product and finding
daily contracts for it formed the core of Alilings new assignment.
Barely a month after, Manuel F. San Mateo III (San Mateo), WWWEC
Sales and Marketing Director, emailed Aliling [if !supportFootnotes][9][endif] to
express dissatisfaction with the latters performance, thus:
Armand,
My expectations is [sic] that GX Shuttles should be 80% full by the 3 rd
week (August 5) after launch (July 15). Pls. make that happen. It has
been more than a month since you came in. I am expecting sales to be
pumping in by now. Thanks.
Nonong
Thereafter, in a letter of September 25, 2004,[if !supportFootnotes][10][endif] Joseph
R. Lariosa (Lariosa), Human Resources Manager of WWWEC, asked
Aliling to report to the Human Resources Department to explain his
absence taken without leave from September 20, 2004.
Aliling responded two days later. He denied being absent on the days
in question, attaching to his reply-letter[if !supportFootnotes][11][endif] a copy of his
timesheet[if !supportFootnotes][12][endif] which showed that he worked from

September 20 to 24, 2004. Alilings explanation came with a query

regarding the withholding of his salary corresponding to September 11
to 25, 2004.
In a separate letter dated September 27, 2004,[if !supportFootnotes][13][endif]
Aliling wrote San Mateo stating: Pursuant to your instruction on
September 20, 2004, I hereby tender my resignation effective October
15, 2004. While WWWEC took no action on his tender, Aliling
nonetheless demanded reinstatement and a written apology, claiming
in a subsequent letter dated October 1, 2004[if !supportFootnotes][14][endif] to
management that San Mateo had forced him to resign.
Lariosas response-letter of October 1, 2004, [if !supportFootnotes][15][endif]
informed Aliling that his case was still in the process of being
evaluated. On October 6, 2004,[if !supportFootnotes][16][endif] Lariosa again
wrote, this time to advise Aliling of the termination of his services
effective as of that date owing to his non-satisfactory performance
during his probationary period. Records show that Aliling, for the period
indicated, was paid his outstanding salary which consisted of:
PhP 4,988.18 (salary for the September 25, 2004 payroll)
1,987.28 (salary for 4 days in October 2004)
------------PhP 6,975.46 Total
Earlier, however, or on October 4, 2004, Aliling filed a Complaint [if !
supportFootnotes][17][endif]
for illegal dismissal due to forced resignation,
nonpayment of salaries as well as damages with the NLRC against
WWWEC. Appended to the complaint was Alilings Affidavit dated
November 12, 2004,[if !supportFootnotes][18][endif] in which he stated: 5. At the
time of my engagement, respondents did not make known to me the
standards under which I will qualify as a regular employee.
Refuting Alilings basic posture, WWWEC stated in its Position Paper
dated November 22, 2004[if !supportFootnotes][19][endif] that, in addition to the
letter-offer and employment contract adverted to, WWWEC and Aliling
have signed a letter of appointment[if !supportFootnotes][20][endif] on June 11,
2004 containing the following terms of engagement:
Additionally, upon the effectivity of your probation, you and your
immediate superior are required to jointly define your
objectives compared with the job requirements of the position. Based
on the pre-agreed objectives, your performance shall be reviewed
on the 3rd month to assess your competence and work attitude.
The 5th month Performance Appraisal shall be the basis in

elevating or confirming
Probationary to Regular.

your

employment

status

from

Failure to meet the job requirements during the probation stage means
that your services may be terminated without prior notice and without
recourse to separation pay.
WWWEC also attached to its Position Paper a memo dated September
20, 2004[if !supportFootnotes][21][endif] in which San Mateo asked Aliling to explain
why he should not be terminated for failure to meet the expected job
performance, considering that the load factor for the GX Shuttles for
the period July to September was only 0.18% as opposed to the
allegedly agreed upon load of 80% targeted for August 5, 2004.
According to WWWEC, Aliling, instead of explaining himself, simply
submitted a resignation letter.
In a Reply-Affidavit dated December 13, 2004, [if !supportFootnotes][22][endif]
Aliling denied having received a copy of San Mateos September 20,
2004 letter.
Issues having been joined, the Labor Arbiter issued on April 25, 2006 [if !
supportFootnotes][23][endif]
a Decision declaring Alilings termination as
unjustified. In its pertinent parts, the decision reads:
The grounds upon which complainants dismissal was based did not
conform not only the standard but also the compliance required under
Article 281 of the Labor Code, Necessarily, complainants termination is
not justified for failure to comply with the mandate the law requires.
Respondents should be ordered to pay salaries corresponding to
the unexpired portion of the contract of employment and all
other benefits amounting to a total of THIRTY FIVE THOUSAND EIGHT
HUNDRED ELEVEN PESOS (P35,811.00) covering the period from
October 6 to December 7, 2004, computed as follows:
Unexpired Portion of the Contract:
Basic Salary P13,000.00
Transportation 3,000.00
Clothing Allowance 800.00
ECOLA 500.00
-------------P17,300.00
10/06/04 12/07/04

P17,300.00 x 2.7 mos. = P35,811.00

Complainants 13th month pay proportionately for 2004 was not shown
to have been paid to complainant, respondent be made liable to him
therefore computed at SIX THOUSAND FIVE HUNDRED THIRTY TWO
PESOS AND 50/100 (P6,532.50).
For engaging the services of counsel to protect his interest,
complainant is likewise entitled to a 10% attorneys fees of the
judgment amount. Such other claims for lack of basis sufficient to
support for their grant are unwarranted.
WHEREFORE, judgment is hereby rendered ordering respondent
company to pay complainant Armando Aliling the sum of THIRTY FIVE
THOUSAND EIGHT HUNDRED ELEVEN PESOS (P35,811.00) representing
his salaries and other benefits as discussed above.
Respondent company is likewise ordered to pay said complainant the
amount of TEN THOUSAND SEVEN HUNDRED SIXTY SIX PESOS AND
85/100 ONLY (10.766.85) representing his proportionate 13 th month
pay for 2004 plus 10% of the total judgment as and by way of
attorneys fees.
Other claims are hereby denied for lack of merit. (Emphasis supplied.)
The labor arbiter gave credence to Alilings allegation about not
receiving and, therefore, not bound by, San Mateos purported
September 20, 2004 memo. The memo, to reiterate, supposedly
apprised Aliling of the sales quota he was, but failed, to meet. Pushing
the point, the labor arbiter explained that Aliling cannot be validly
terminated for non-compliance with the quota threshold absent a prior
advisory of the reasonable standards upon which his performance
would be evaluated.
Both parties appealed the above decision to the NLRC, which affirmed
the Decision in toto in its Resolution dated May 31, 2007. The separate
motions for reconsideration were also denied by the NLRC in its
Resolution dated August 31, 2007.
Therefrom, Aliling went on certiorari to the CA, which eventually
rendered the assailed Decision, the dispositive portion of which reads:
WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions
of respondent (Third Division) National Labor Relations Commission are
AFFIRMED,
with
the
following
MODIFICATION/CLARIFICATION:
Respondents Wide Wide World Express Corp. and its officers, Jose B.

Feliciano, Manuel F. San Mateo III and Joseph R. Lariosa, are jointly
and severally liable to pay petitioner Armando Aliling: (A) the sum of
Forty Two Thousand Three Hundred Thirty Three & 50/100 (P42,333.50)
as the total money judgment, (B) the sum of Four Thousand Two
Hundred Thirty Three & 35/100 (P4,233.35) as attorneys fees, and (C)
the additional sum equivalent to one-half (1/2) month of petitioners
salary as separation pay.
SO ORDERED.[if !supportFootnotes][24][endif] (Emphasis supplied.)
The CA anchored its assailed action on the strength of the following
premises: (a) respondents failed to prove that Alilings dismal
performance constituted gross and habitual neglect necessary to
justify his dismissal; (b) not having been informed at the time of his
engagement of the reasonable standards under which he will qualify as
a regular employee, Aliling was deemed to have been hired from day
one as a regular employee; and (c) the strained relationship existing
between the parties argues against the propriety of reinstatement.
Alilings motion for reconsideration was rejected by the CA through the
assailed Resolution dated December 15, 2008.
Hence, the instant petition.
The Issues
Aliling raises the following issues for consideration:
A. The failure of the Court of Appeals to order reinstatement (despite
its finding that petitioner was illegally dismissed from employment) is
contrary to law and applicable jurisprudence.
B. The failure of the Court of Appeals to award backwages (even if it
did not order reinstatement) is contrary to law and applicable
jurisprudence.
C. The failure of the Court of Appeals to award moral and exemplary
damages (despite its finding that petitioner was dismissed to prevent
the acquisition of his regular status) is contrary to law and applicable
jurisprudence.[if !supportFootnotes][25][endif]
In their Comment,[if !supportFootnotes][26][endif] respondents reiterated their
position that WWWEC hired petitioner on a probationary basis and fired
him before he became a regular employee.
The Courts Ruling

The petition is partly meritorious.

Petitioner is a regular employee
On a procedural matter, petitioner Aliling argues that WWWEC, not
having appealed from the judgment of CA which declared Aliling as a
regular employee from the time he signed the employment contract, is
now precluded from questioning the appellate courts determination as
to the nature of his employment.
Petitioner errs. The Court has, when a case is on appeal, the authority
to review matters not specifically raised or assigned as error if their
consideration is necessary in reaching a just conclusion of the case. We
said as much in Sociedad Europea de Financiacion, SA v. Court of
Appeals,[if !supportFootnotes][27][endif] It is axiomatic that an appeal, once
accepted by this Court, throws the entire case open to review, and that
this Court has the authority to review matters not specifically raised or
assigned as error by the parties, if their consideration is necessary in
arriving at a just resolution of the case.
The issue of whether or not petitioner was, during the period material,
a probationary or regular employee is of pivotal import. Its resolution is
doubtless necessary at arriving at a fair and just disposition of the
controversy.
The Labor Arbiter cryptically held in his decision dated April 25, 2006
that:
Be that as it may, there appears no showing that indeed the said
September 20, 2004 Memorandum addressed to complainant was
received by him. Moreover, complainants tasked where he was
assigned was a new developed service. In this regard, it is noted:
Due process dictates that an employee be apprised beforehand of the
conditions of his employment and of the terms of advancement
therein. Precisely, implicit in Article 281 of the Labor Code is the
requirement that reasonable standards be previously made known by
the employer to the employee at the time of his engagement (Ibid,
citing Sameer Overseas Placement Agency, Inc. vs. NLRC, G.R. No.
132564, October 20, 1999).[if !supportFootnotes][28][endif]
From our review, it appears that the labor arbiter, and later the NLRC,
considered Aliling a probationary employee despite finding that he was

not informed of the reasonable standards by which his probationary

employment was to be judged.
The CA, on the other hand, citing Cielo v. National Labor Relations
Commission,[if !supportFootnotes][29][endif] ruled that petitioner was a regular
employee from the outset inasmuch as he was not informed of the
standards by which his probationary employment would be measured.
The CA wrote:
Petitioner was regularized from the time of the execution of the
employment contract on June 11, 2004, although respondent company
had arbitrarily shortened his tenure. As pointed out, respondent
company did not make known the reasonable standards under
which he will qualify as a regular employee at the time of his
engagement. Hence, he was deemed to have been hired from
day one as a regular employee.[if !supportFootnotes][30][endif] (Emphasis
supplied.)
WWWEC, however, excepts on the argument that it put Aliling on
notice that he would be evaluated on the 3 rd and 5th months of his
probationary employment. To WWWEC, its efforts translate to sufficient
compliance with the requirement that a probationary worker be
apprised of the reasonable standards for his regularization. WWWEC
invokes the ensuing holding in Alcira v. National Labor Relations
Commission[if !supportFootnotes][31][endif] to support its case:
Conversely, an employer is deemed to substantially comply with the
rule on notification of standards if he apprises the employee that he
will be subjected to a performance evaluation on a particular date after
his hiring. We agree with the labor arbiter when he ruled that:
In the instant case, petitioner cannot successfully say that he was
never informed by private respondent of the standards that he must
satisfy in order to be converted into regular status. This rans (sic)
counter to the agreement between the parties that after five
months of service the petitioners performance would be
evaluated. It is only but natural that the evaluation should be made
vis--vis the performance standards for the job. Private respondent
Trifona Mamaradlo speaks of such standard in her affidavit referring to
the fact that petitioner did not perform well in his assigned work and
his attitude was below par compared to the companys standard
required of him. (Emphasis supplied.)
WWWECs contention is untenable.

Alcira is cast under a different factual setting. There, the labor arbiter,
the NLRC, the CA, and even finally this Court were one in their findings
that the employee concerned knew, having been duly informed during
his engagement, of the standards for becoming a regular employee.
This is in stark contrast to the instant case where the element of being
informed of the regularizing standards does not obtain. As such, Alcira
cannot be made to apply to the instant case.
To note, the June 2, 2004 letter-offer itself states that the regularization
standards or the performance norms to be used are still to be agreed
upon by Aliling and his supervisor. WWWEC has failed to prove
that an agreement as regards thereto has been reached. Clearly then,
there were actually no performance standards to speak of. And lest it
be overlooked, Aliling was assigned to GX trucking sales, an activity
entirely different to the Seafreight Sales he was originally hired and
trained for. Thus, at the time of his engagement, the standards relative
to his assignment with GX sales could not have plausibly been
communicated to him as he was under Seafreight Sales. Even for this
reason alone, the conclusion reached in Alcira is of little relevant to the
instant case.
Based on the facts established in this case in light of extant
jurisprudence, the CAs holding as to the kind of employment petitioner
enjoyed is correct. So was the NLRC ruling, affirmatory of that of the
labor arbiter. In the final analysis, one common thread runs through the
holding of the labor arbiter, the NLRC and the CA, i.e., petitioner Aliling,
albeit hired from managements standpoint as a probationary
employee, was deemed a regular employee by force of the following
self-explanatory provisions:
Article 281 of the Labor Code
ART. 281. Probationary employment. - Probationary employment shall
not exceed six (6) months from the date the employee started working,
unless it is covered by an apprenticeship agreement stipulating a
longer period. The services of an employee who has been engaged on
a probationary basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the
time of his engagement. An employee who is allowed to work after
a probationary period shall be considered a regular employee.
(Emphasis supplied.)
Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A
of the Labor Code

Sec. 6. Probationary employment. There is probationary employment

where the employee, upon his engagement, is made to undergo a trial
period where the employee determines his fitness to qualify for regular
employment, based on reasonable standards made known to him at
the time of engagement.
Probationary employment shall be governed by the following rules:
xxxx
(d) In all cases of probationary employment, the employer shall
make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement.
Where no standards are made known to the employee at that
time, he shall be deemed a regular employee. (Emphasis
supplied.)
To repeat, the labor arbiter, NLRC and the CA are agreed, on the basis
of documentary evidence adduced, that respondent WWWEC did not
inform petitioner Aliling of the reasonable standards by which his
probation would be measured against at the time of his engagement.
The Court is loathed to interfere with this factual determination. As We
have held:
Settled is the rule that the findings of the Labor Arbiter, when
affirmed by the NLRC and the Court of Appeals, are binding on
the Supreme Court, unless patently erroneous. It is not the
function of the Supreme Court to analyze or weigh all over again the
evidence already considered in the proceedings below. The jurisdiction
of this Court in a petition for review on certiorari is limited to reviewing
only errors of law, not of fact, unless the factual findings being assailed
are not supported by evidence on record or the impugned judgment is
based on a misapprehension of facts.[if !supportFootnotes][32][endif]
The more recent Peafrancia Tours and Travel Transport, Inc., v.
Sarmiento[if !supportFootnotes][33][endif] has reaffirmed the above ruling, to wit:
Finally, the CA affirmed the ruling of the NLRC and adopted as its own
the latter's factual findings. Long-established is the doctrine that
findings of fact of quasi-judicial bodies x x x are accorded respect, even
finality, if supported by substantial evidence. When passed upon and
upheld by the CA, they are binding and conclusive upon this Court and
will not normally be disturbed. Though this doctrine is not without
exceptions, the Court finds that none are applicable to the present
case.

WWWEC also cannot validly argue that the factual findings being
assailed are not supported by evidence on record or the
impugned judgment is based on a misapprehension of facts. Its
very own letter-offer of employment argues against its above posture.
Excerpts of the letter-offer:
Additionally, upon the effectivity of your probation, you and your
immediate superior are required to jointly define your
objectives compared with the job requirements of the position.
Based on the pre-agreed objectives, your performance shall be
reviewed on the 3rd month to assess your competence and work
attitude. The 5th month Performance Appraisal shall be the basis in
elevating or confirming your employment status from Probationary to
Regular.
Failure to meet the job requirements during the probation stage means
that your services may be terminated without prior notice and without
recourse to separation pay. (Emphasis supplied.)
Respondents further allege that San Mateos email dated July 16, 2004
shows that the standards for his regularization were made known to
petitioner Aliling at the time of his engagement. To recall, in that email
message, San Mateo reminded Aliling of the sales quota he ought to
meet as a condition for his continued employment, i.e., that the GX
trucks should already be 80% full by August 5, 2004. Contrary to
respondents contention, San Mateos email cannot support their
allegation on Aliling being informed of the standards for his continued
employment, such as the sales quota, at the time of his
engagement. As it were, the email message was sent to Aliling more
than a month after he signed his employment contract with WWWEC.
The aforequoted Section 6 of the Implementing Rules of Book VI, Rule
VIII-A of the Code specifically requires the employer to inform the
probationary employee of such reasonable standards at the time of
his engagement, not at any time later; else, the latter shall be
considered a regular employee. Thus, pursuant to the explicit provision
of Article 281 of the Labor Code, Section 6(d) of the Implementing
Rules of Book VI, Rule VIII-A of the Labor Code and settled
jurisprudence, petitioner Aliling is deemed a regular employee as of
June 11, 2004, the date of his employment contract.

Petitioner was illegally dismissed

To justify fully the dismissal of an employee, the employer must, as a

rule, prove that the dismissal was for a just cause and that the
employee was afforded due process prior to dismissal. As a
complementary principle, the employer has the onus of proving with
clear, accurate, consistent, and convincing evidence the validity of the
dismissal.[if !supportFootnotes][34][endif]
WWWEC had failed to discharge its twin burden in the instant case.
First off, the attendant circumstances in the instant case aptly show
that the issue of petitioners alleged failure to achieve his quota, as a
ground for terminating employment, strikes the Court as a mere
afterthought on the part of WWWEC. Consider: Lariosas letter of
September 25, 2004 already betrayed managements intention to
dismiss the petitioner for alleged unauthorized absences. Aliling was in
fact made to explain and he did so satisfactorily. But, lo and behold,
WWWEC nonetheless proceeded with its plan to dismiss the petitioner
for non-satisfactory performance, although the corresponding
termination letter dated October 6, 2004 did not even specifically state
Alilings non-satisfactory performance, or that Alilings termination was
by reason of his failure to achieve his set quota.
What WWWEC considered as the evidence purportedly showing it gave
Aliling the chance to explain his inability to reach his quota was a
purported September 20, 2004 memo of San Mateo addressed to the
latter. However, Aliling denies having received such letter and WWWEC
has failed to refute his contention of non-receipt. In net effect, WWWEC
was at a loss to explain the exact just reason for dismissing Aliling.
At any event, assuming for argument that the petitioner indeed failed
to achieve his sales quota, his termination from employment on that
ground would still be unjustified.
Article 282 of the Labor Code considers any of the following acts or
omission on the part of the employee as just cause or ground for
terminating employment:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;

(d) Commission of a crime or offense by the employee against the

person of his employer or any immediate member of his family or his
duly authorized representatives; and
(e) Other causes analogous to the foregoing. (Emphasis supplied)
In Lim v. National Labor Relations Commission,[if !supportFootnotes][35][endif] the
Court considered inefficiency as an analogous just cause for
termination of employment under Article 282 of the Labor Code:
We cannot but agree with PEPSI that gross inefficiency falls
within the purview of other causes analogous to the foregoing,
this constitutes, therefore, just cause to terminate an
employee under Article 282 of the Labor Code. One is analogous
to another if it is susceptible of comparison with the latter either in
general or in some specific detail; or has a close relationship with the
latter. Gross inefficiency is closely related to gross neglect, for both
involve specific acts of omission on the part of the employee resulting
in damage to the employer or to his business. In Buiser vs. Leogardo,
this Court ruled that failure to observed prescribed standards to
inefficiency may constitute just cause for dismissal. (Emphasis
supplied.)
It did so anew in Leonardo v. National Labor Relations Commission [if !
supportFootnotes][36][endif]
on the following rationale:
An employer is entitled to impose productivity standards for its
workers, and in fact, non-compliance may be visited with a penalty
even more severe than demotion. Thus,
[t]he practice of a company in laying off workers because they
failed to make the work quota has been recognized in this
jurisdiction. (Philippine American Embroideries vs. Embroidery and
Garment Workers, 26 SCRA 634, 639). In the case at bar, the
petitioners' failure to meet the sales quota assigned to each of them
constitute a just cause of their dismissal, regardless of the permanent
or probationary status of their employment. Failure to observe
prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean failure to attain
work goals or work quotas, either by failing to complete the same
within the allotted reasonable period, or by producing unsatisfactory
results. This management prerogative of requiring standards
may be availed of so long as they are exercised in good faith
for the advancement of the employer's interest. (Emphasis
supplied.)

In fine, an employees failure to meet sales or work quotas falls under

the concept of gross inefficiency, which in turn is analogous to gross
neglect of duty that is a just cause for dismissal under Article 282 of
the Code. However, in order for the quota imposed to be considered a
valid productivity standard and thereby validate a dismissal,
managements prerogative of fixing the quota must be exercised in
good faith for the advancement of its interest. The duty to prove good
faith, however, rests with WWWEC as part of its burden to show that
the dismissal was for a just cause. WWWEC must show that such quota
was imposed in good faith. This WWWEC failed to do, perceptibly
because it could not. The fact of the matter is that the alleged
imposition of the quota was a desperate attempt to lend a semblance
of validity to Alilings illegal dismissal. It must be stressed that even
WWWECs sales manager, Eve Amador (Amador), in an internal e-mail
to San Mateo, hedged on whether petitioner performed below or above
expectation:
Could not quantify level of performance as he as was tasked to handle
a new product (GX). Revenue report is not yet administered by IT on a
month-to-month basis. Moreover, this in a way is an experimental
activity. Practically you have a close monitoring with Armand with
regards to his performance. Your assessment of him would be more
accurate.
Being an experimental activity and having been launched for the first
time, the sales of GX services could not be reasonably quantified. This
would explain why Amador implied in her email that other bases
besides sales figures will be used to determine Alilings performance.
And yet, despite such a neutral observation, Aliling was still dismissed
for his dismal sales of GX services. In any event, WWWEC failed to
demonstrate the reasonableness and the bona fides on the quota
imposition.
Employees must be reminded that while probationary employees do
not enjoy permanent status, they enjoy the constitutional protection of
security of tenure. They can only be terminated for cause or when they
otherwise fail to meet the reasonable standards made known to them
by the employer at the time of their engagement. [if !supportFootnotes][37][endif]
Respondent WWWEC miserably failed to prove the termination of
petitioner was for a just cause nor was there substantial evidence to
demonstrate the standards were made known to the latter at the time
of his engagement. Hence, petitioners right to security of tenure was
breached.
Alilings right to procedural due process was violated

As earlier stated, to effect a legal dismissal, the employer must show

not only a valid ground therefor, but also that procedural due process
has properly been observed. When the Labor Code speaks of
procedural due process, the reference is usually to the two (2)-written
notice rule envisaged in Section 2 (III), Rule XXIII, Book V of the
Omnibus Rules Implementing the Labor Code, which provides:
Section 2. Standard of due process: requirements of notice. In all cases
of termination of employment, the following standards of due process
shall be substantially observed.
I. For termination of employment based on just causes as defined in
Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or
grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side;
(b) A hearing or conference during which the employee concerned,
with the assistance of counsel if the employee so desires, is given
opportunity to respond to the charge, present his evidence or rebut the
evidence presented against him; and
(c) A written notice [of] termination served on the employee indicating
that upon due consideration of all the circumstance, grounds have
been established to justify his termination.
In case of termination, the foregoing notices shall be served on the
employees last known address.
MGG Marine Services, Inc. v. NLRC[if !supportFootnotes][38][endif] tersely described
the mechanics of what may be considered a two-part due process
requirement which includes the two-notice rule, x x x one, of the
intention to dismiss, indicating therein his acts or omissions
complained against, and two, notice of the decision to dismiss; and an
opportunity to answer and rebut the charges against him, in between
such notices.
King of Kings Transport, Inc. v. Mamac[if !supportFootnotes][39][endif] expounded on
this procedural requirement in this manner:
(1) The first written notice to be served on the employees should
contain the specific causes or grounds for termination against them,
and a directive that the employees are given the opportunity to submit
their written explanation within a reasonable period. Reasonable

opportunity under the Omnibus Rules means every kind of assistance

that management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a
period of at least five calendar days from receipt of the notice xxxx
Moreover, in order to enable the employees to intelligently prepare
their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the
charge against the employees. A general description of the charge will
not suffice. Lastly, the notice should specifically mention which
company rules, if any, are violated and/or which among the grounds
under Art. 288 [of the Labor Code] is being charged against the
employees
(2) After serving the first notice, the employees should schedule and
conduct a hearing or conference wherein the employees will be
given the opportunity to (1) explain and clarify their defenses to the
charge against them; (2) present evidence in support of their defenses;
and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are
given the chance to defend themselves personally, with the assistance
of a representative or counsel of their choice x x x.
(3) After determining that termination is justified, the employer shall
serve the employees a written notice of termination indicating
that: (1) all the circumstances involving the charge against the
employees have been considered; and (2) grounds have been
established to justify the severance of their employment. (Emphasis in
the original.)
Here, the first and second notice requirements have not been properly
observed, thus tainting petitioners dismissal with illegality.
The adverted memo dated September 20, 2004 of WWWEC supposedly
informing Aliling of the likelihood of his termination and directing him
to account for his failure to meet the expected job performance would
have had constituted the charge sheet, sufficient to answer for the first
notice requirement, but for the fact that there is no proof such letter
had been sent to and received by him. In fact, in his December 13,
2004 Complainants Reply Affidavit, Aliling goes on to tag such
letter/memorandum as fabrication. WWWEC did not adduce proof to
show that a copy of the letter was duly served upon Aliling. Clearly
enough, WWWEC did not comply with the first notice requirement.
Neither was there compliance with the imperatives of a hearing or
conference. The Court need not dwell at length on this particular
breach of the due procedural requirement. Suffice it to point out that

the record is devoid of any showing of a hearing or conference having

been conducted. On the contrary, in its October 1, 2004 letter to
Aliling, or barely five (5) days after it served the notice of termination,
WWWEC acknowledged that it was still evaluating his case. And the
written notice of termination itself did not indicate all the
circumstances involving the charge to justify severance of
employment.
Aliling is entitled to backwages
and separation pay in lieu of reinstatement
As may be noted, the CA found Alilings dismissal as having been
illegally effected, but nonetheless concluded that his employment
ceased at the end of the probationary period. Thus, the appellate court
merely affirmed the monetary award made by the NLRC, which
consisted of the payment of that amount corresponding to the
unserved portion of the contract of employment.
The case disposition on the award is erroneous.
As earlier explained, Aliling cannot be rightfully considered as a mere
probationary employee. Accordingly, the probationary period set in the
contract of employment dated June 11, 2004 was of no moment. In net
effect, as of that date June 11, 2004, Aliling became part of the
WWWEC organization as a regular employee of the company without a
fixed term of employment. Thus, he is entitled to backwages reckoned
from the time he was illegally dismissed on October 6, 2004, with a
PhP 17,300.00 monthly salary, until the finality of this Decision. This
disposition hews with the Courts ensuing holding in Javellana v. Belen:[if
!supportFootnotes][40][endif]

Article 279 of the Labor Code, as amended by Section 34 of Republic

Act 6715 instructs:
Art. 279. Security of Tenure. - In cases of regular employment, the
employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is
unjustly
dismissed
from
work
shall
be
entitled
to
reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from
him up to the time of his actual reinstatement. (Emphasis
supplied)
Clearly, the law intends the award of backwages and similar benefits to
accumulate past the date of the Labor Arbiters decision until the

dismissed employee is actually reinstated. But if, as in this case,

reinstatement is no longer possible, this Court has consistently
ruled that backwages shall be computed from the time of
illegal dismissal until the date the decision becomes final.
(Emphasis supplied.)
Additionally, Aliling is entitled to separation pay
reinstatement on the ground of strained relationship.

in

lieu

of

In Golden Ace Builders v. Talde,[if !supportFootnotes][41][endif] the Court ruled:

The basis for the payment of backwages is different from that for the
award of separation pay. Separation pay is granted where
reinstatement is no longer advisable because of strained relations
between the employee and the employer. Backwages represent
compensation that should have been earned but were not collected
because of the unjust dismissal. The basis for computing backwages is
usually the length of the employee's service while that for separation
pay is the actual period when the employee was unlawfully prevented
from working.
As to how both awards should be computed, Macasero v. Southern
Industrial Gases Philippines instructs:
[T]he award of separation pay is inconsistent with a finding that there
was no illegal dismissal, for under Article 279 of the Labor Code and as
held in a catena of cases, an employee who is dismissed without just
cause and without due process is entitled to backwages and
reinstatement or payment of separation pay in lieu thereof:
Thus, an illegally dismissed employee is entitled to two reliefs:
backwages and reinstatement. The two reliefs provided are
separate and distinct. In instances where reinstatement is no
longer feasible because of strained relations between the
employee and the employer, separation pay is granted. In
effect, an illegally dismissed employee is entitled to either
reinstatement, if viable, or separation pay if reinstatement is
no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are
reinstatement without loss of seniority rights, and payment of
backwages computed from the time compensation was withheld up to
the date of actual reinstatement. Where reinstatement is no longer
viable as an option, separation pay equivalent to one (1) month salary
for every year of service should be awarded as an alternative. The

payment of separation pay is in addition to payment of backwages. x x

x
Velasco v. National Labor Relations Commission emphasizes:
The accepted doctrine is that separation pay may avail in lieu of
reinstatement if reinstatement is no longer practical or in the best
interest of the parties. Separation pay in lieu of reinstatement may
likewise be awarded if the employee decides not to be reinstated.
(emphasis in the original; italics supplied)
Under the doctrine of strained relations, the payment of
separation pay is considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or
viable. On one hand, such payment liberates the employee from what
could be a highly oppressive work environment. On the other hand, it
releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.
Strained relations must be demonstrated as a fact, however, to
be adequately supported by evidence substantial evidence to show
that the relationship between the employer and the employee is
indeed strained as a necessary consequence of the judicial
controversy.
In the present case, the Labor Arbiter found that actual
animosity existed between petitioner Azul and respondent as a
result of the filing of the illegal dismissal case. Such finding,
especially when affirmed by the appellate court as in the case
at bar, is binding upon the Court, consistent with the prevailing
rules that this Court will not try facts anew and that findings of
facts of quasi-judicial bodies are accorded great respect, even
finality. (Emphasis supplied.)
As the CA correctly observed, To reinstate petitioner [Aliling] would
only create an atmosphere of antagonism and distrust, more so that he
had only a short stint with respondent company. [if !supportFootnotes][42][endif] The
Court need not belabor the fact that the patent animosity that had
developed between employer and employee generated what may be
considered as the arbitrary dismissal of the petitioner.
Following the pronouncements of this Court Sagales v. Rustans
Commercial Corporation,[if !supportFootnotes][43][endif] the computation of
separation pay in lieu of reinstatement includes the period for which
backwages were awarded:

Thus, in lieu of reinstatement, it is but proper to award petitioner

separation pay computed at one-month salary for every year of
service, a fraction of at least six (6) months considered as one
whole year. In the computation of separation pay, the period
where backwages are awarded must be included. (Emphasis
supplied.)
Thus, Aliling is entitled to both backwages and separation pay (in lieu
of reinstatement) in the amount of one (1) months salary for every
year of service, that is, from June 11, 2004 (date of employment
contract) until the finality of this decision with a fraction of a year of at
least six (6) months to be considered as one (1) whole year. As
determined by the labor arbiter, the basis for the computation of
backwages and separation pay will be Alilings monthly salary at PhP
17,300.
Finally, Aliling is entitled to an award of PhP 30,000 as nominal
damages in consonance with prevailing jurisprudence[if !supportFootnotes][44]
[endif]
for violation of due process.
Petitioner is not entitled to moral and exemplary damages
In Nazareno v. City of Dumaguete,[if !supportFootnotes][45][endif] the Court
expounded on the requisite elements for a litigants entitlement to
moral damages, thus:
Moral damages are awarded if the following elements exist in the case:
(1) an injury clearly sustained by the claimant; (2) a culpable act or
omission factually established; (3) a wrongful act or omission by the
defendant as the proximate cause of the injury sustained by the
claimant; and (4) the award of damages predicated on any of the cases
stated Article 2219 of the Civil Code. In addition, the person claiming
moral damages must prove the existence of bad faith by clear and
convincing evidence for the law always presumes good faith. It is not
enough that one merely suffered sleepless nights, mental anguish, and
serious anxiety as the result of the actuations of the other party.
Invariably such action must be shown to have been willfully done in
bad faith or with ill motive. Bad faith, under the law, does not
simply connote bad judgment or negligence. It imports a
dishonest purpose or some moral obliquity and conscious
doing of a wrong, a breach of a known duty through some
motive or interest or ill will that partakes of the nature of
fraud. (Emphasis supplied.)

In alleging that WWWEC acted in bad faith, Aliling has the burden of
proof to present evidence in support of his claim, as ruled in Culili v.
Eastern Telecommunications Philippines, Inc.:[if !supportFootnotes][46][endif]
According to jurisprudence, basic is the principle that good faith is
presumed and he who alleges bad faith has the duty to prove the
same. By imputing bad faith to the actuations of ETPI, Culili has the
burden of proof to present substantial evidence to support the
allegation of unfair labor practice. Culili failed to discharge this burden
and his bare allegations deserve no credit.
This was reiterated in United Claimants Association of NEA (UNICAN) v.
National Electrification Administration (NEA),[if !supportFootnotes][47][endif] in this
wise:
It must be noted that the burden of proving bad faith rests on the one
alleging it. As the Court ruled in Culili v. Eastern Telecommunications,
Inc., According to jurisprudence, basic is the principle that good faith is
presumed and he who alleges bad faith has the duty to prove the
same. Moreover, in Spouses Palada v. Solidbank Corporation, the Court
stated, Allegations of bad faith and fraud must be proved by clear and
convincing evidence.
Similarly, Aliling has failed to overcome such burden to prove bad faith
on the part of WWWEC. Aliling has not presented any clear and
convincing evidence to show bad faith. The fact that he was illegally
dismissed is insufficient to prove bad faith. Thus, the CA correctly ruled
that [t]here was no sufficient showing of bad faith or abuse of
management prerogatives in the personal action taken against
petitioner.[if !supportFootnotes][48][endif] In Lambert Pawnbrokers and Jewelry
Corporation v. Binamira,[if !supportFootnotes][49][endif] the Court ruled:
A dismissal may be contrary to law but by itself alone, it does not
establish bad faith to entitle the dismissed employee to moral
damages. The award of moral and exemplary damages cannot be
justified solely upon the premise that the employer dismissed his
employee without authorized cause and due process.
The officers of WWWEC cannot be held
jointly and severally liable with the company
The CA held the president of WWWEC, Jose B. Feliciano, San Mateo and
Lariosa jointly and severally liable for the monetary awards of Aliling on
the ground that the officers are considered employers acting in the
interest of the corporation. The CA cited NYK International Knitwear

Corporation Philippines (NYK) v. National Labor Relations Commission [if !

supportFootnotes][50][endif]
in support of its argument. Notably, NYK in turn cited
A.C. Ransom Labor Union-CCLU v. NLRC.[if !supportFootnotes][51][endif]
Such ruling has been reversed by the Court in Alba v. Yupangco,[if
supportFootnotes][52][endif]
where the Court ruled:

By Order of September 5, 2007, the Labor Arbiter denied respondents

motion to quash the 3rd alias writ. Brushing aside respondents
contention that his liability is merely joint, the Labor Arbiter ruled:
Such issue regarding the personal liability of the officers of a
corporation for the payment of wages and money claims to its
employees, as in the instant case, has long been resolved by the
Supreme Court in a long list of cases [A.C. Ransom Labor Union-CLU
vs. NLRC (142 SCRA 269) and reiterated in the cases of Chua vs. NLRC
(182 SCRA 353), Gudez vs. NLRC (183 SCRA 644)]. In the
aforementioned cases, the Supreme Court has expressly held that the
irresponsible officer of the corporation (e.g. President) is liable for the
corporations obligations to its workers. Thus, respondent Yupangco,
being the president of the respondent YL Land and Ultra Motors Corp.,
is properly jointly and severally liable with the defendant corporations
for the labor claims of Complainants Alba and De Guzman. x x x
xxxx
As reflected above, the Labor Arbiter held that respondents liability is
solidary.
There is solidary liability when the obligation expressly so states, when
the law so provides, or when the nature of the obligation so requires.
MAM Realty Development Corporation v. NLRC, on solidary liability of
corporate officers in labor disputes, enlightens:
x x x A corporation being a juridical entity, may act only through its
directors, officers and employees. Obligations incurred by them, acting
as such corporate agents are not theirs but the direct accountabilities
of the corporation they represent. True solidary liabilities may at times
be incurred but only when exceptional circumstances warrant such as,
generally, in the following cases:
1. When directors and trustees or, in appropriate cases, the officers of
a corporation:
(a) vote for or assent to patently unlawful acts of the corporation;

(b) act in bad faith or with gross negligence in directing the corporate
affairs;
xxxx
In labor cases, for instance, the Court has held corporate directors and
officers solidarily liable with the corporation for the termination of
employment of employees done with malice or in bad faith.
A review of the facts of the case does not reveal ample and
satisfactory proof that respondent officers of WWEC acted in bad faith
or with malice in effecting the termination of petitioner Aliling. Even
assuming arguendo that the actions of WWWEC are ill-conceived and
erroneous, respondent officers cannot be held jointly and solidarily with
it. Hence, the ruling on the joint and solidary liability of individual
respondents must be recalled.
Aliling is entitled to Attorneys Fees and Legal Interest
Petitioner Aliling is also entitled to attorneys fees in the amount of ten
percent (10%) of his total monetary award, having been forced to
litigate in order to seek redress of his grievances, pursuant to Article
111 of the Labor Code and following our ruling in Exodus International
Construction Corporation v. Biscocho,[if !supportFootnotes][53][endif] to wit:
In Rutaquio v. National Labor Relations Commission, this Court held
that:
It is settled that in actions for recovery of wages or where an employee
was forced to litigate and, thus, incur expenses to protect his rights
and interest, the award of attorneys fees is legally and morally
justifiable.
In Producers Bank of the Philippines v. Court of Appeals this Court ruled
that:
Attorneys fees may be awarded when a party is compelled to litigate or
to incur expenses to protect his interest by reason of an unjustified act
of the other party.
While in Lambert Pawnbrokers and Jewelry Corporation,[if !supportFootnotes][54]
[endif]
the Court specifically ruled:
However, the award of attorneys fee is warranted pursuant to Article
111 of the Labor Code. Ten (10%) percent of the total award is usually
the reasonable amount of attorneys fees awarded. It is settled that
where an employee was forced to litigate and, thus, incur expenses to

protect his rights and interest, the award of attorneys fees is legally
and morally justifiable.
Finally, legal interest shall be imposed on the monetary awards herein
granted at the rate of 6% per annum from October 6, 2004 (date of
termination) until fully paid.
WHEREFORE, the petition is PARTIALLY GRANTED. The July 3, 2008
Decision of the Court of Appeals in CA-G.R. SP No. 101309 is hereby
MODIFIED to read:
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed
Resolutions of respondent (Third Division) National Labor Relations
Commission
are
AFFIRMED,
with
the
following
MODIFICATION/CLARIFICATION: Respondent Wide Wide World
Express Corp. is liable to pay Armando Aliling the following: (a)
backwages reckoned from October 6, 2004 up to the finality of this
Decision based on a salary of PhP 17,300 a month, with interest at 6%
per annum on the principal amount from October 6, 2004 until fully
paid; (b) the additional sum equivalent to one (1) month salary for
every year of service, with a fraction of at least six (6) months
considered as one whole year based on the period from June 11, 2004
(date of employment contract) until the finality of this Decision, as
separation pay; (c) PhP 30,000 as nominal damages; and (d) Attorneys
Fees equivalent to 10% of the total award.
SO ORDERED.